SEIGMA team examines lottery sales during first year of casino operations in state

Mark Nichols, PhD, a professor of economics at the University of Nevada, Reno, has twenty years of experience analyzing the social and economic impacts of casinos.  Working with the SEIGMA economics team at the University of Massachusetts Donahue Institute, Dr. Nichols has completed an initial assessment of the first year of Massachusetts casino gambling impacts on the state's lottery sales

Both statewide and nationally, there is concern about the impact of the introduction of casinos on lottery sales.  In Massachusetts, we are in the fortunate and unique position of having detailed sales data from the state lottery that allows us to assess the impact of casino gambling on lottery sales over time and at different levels of resolution (i.e., in host and surrounding communities, at different driving distances, and statewide).  As casino gambling expands in Massachusetts, the Commonwealth has made protecting the state lottery a priority.  Lottery revenues are the largest source of unrestricted local aid in Massachusetts and the second largest source of all local aid. In fiscal year 2015, total lottery sales in Massachusetts were $5.014 billion and its net profit was $985.8 million, of which $945.8 million was distributed to municipalities as direct local aid.

With the cooperation of the Massachusetts Lottery, we were able to analyze detailed sales data that allowed an assessment of the impact of casino gambling on lottery sales over time and at different geographic levels of resolution.  The lottery provided us with agent-specific ticket sales by game and by fiscal year.  This allowed the team to analyze changes in lottery sales at several levels, including statewide, in the host and MGC-designated surrounding communities near the casino, and for agents at different driving distances from the casino. We examined sales bi-weekly because recording of weekly sales can vary.

Based on our analysis of the detailed sales data, we found that lottery sales have not decreased statewide, nor near the Plainridge Park Casino, during the first year after the slot parlor opened in June 2015. However, the analysis shows that lottery revenues for agents nearer the casino grew more slowly on average than the rest of the state. We will continue to monitor lottery sales to determine if the first-year results reflect longer term trends and whether the much larger casinos planned for Everett and Springfield will have similar or different impacts on lottery sales in the Commonwealth.

Published 01/19/2017